New Delhi, Aug 11 — The Banking Times Desk
Highlights
- Credit discipline strengthened via IBC, CRILC and early-warning frameworks.
- NPA resolution push with asset transfer mechanisms and NARCL consolidation.
- PSB governance upgrades: arms-length leadership selection, non-executive chairmen, performance-linked extensions.
- Key laws: Banking Regulation (Amendment) Act, 2020; Banking Laws (Amendment) Act, 2025.
- MSME credit support through MCGS-MSME, CGTMSE, ECLGS and an AI-driven assessment model.
- Digital payments surge to 22,831 crore in FY25; UPI sets monthly record in July 2025.
- Details shared by MoS Finance Pankaj Chaudhary in a written reply to Lok Sabha.
Banking sector gets overhaul
The Government of India, in partnership with the Reserve Bank of India (RBI), announced a multi-pronged reform package to improve credit discipline, accelerate stressed-asset resolution and raise governance standards across public sector and co-operative banks.
- Credit discipline: Insolvency and Bankruptcy Code (IBC); Central Repository of Information on Large Credits (CRILC).
- Stressed assets: Time-bound recognition and resolution, automated Early Warning Systems, transfer framework.
- NARCL: Consolidates fragmented bad loans for professional resolution and better recovery.
- Governance: Arms-length selection via Financial Services Institutions Bureau; non-executive chairmen; performance-linked extensions.
- Co-operative banks & laws: Banking Regulation (Amendment) Act, 2020; Banking Laws (Amendment) Act, 2025.
MSMEs get credit push
- Mutual Credit Guarantee Scheme (MCGS-MSME): Guarantees for term loans up to Rs. 100 crore; valid till guarantees total Rs. 7 lakh crore or four years from 27 Jan 2025.
- ECLGS (ended Mar 31, 2023): Rs. 3.68 lakh crore support to 1.19 crore businesses; Rs. 2.42 lakh crore sanctioned to 1.13 crore MSMEs.
- New Credit Assessment Model (Mar 6, 2025): Digitally verifiable data and automated journeys for objective appraisal (ETB and NTB).
- CGTMSE: Up to 85% guarantee cover for loans up to Rs. 10 crore; fee 0.37%–1.20%; as on Jul 31, 2025: 1.22 crore guarantees worth Rs. 10.50 lakh crore.
Digital payments at record highs
India’s digital transactions rose from 2,071 crore in FY18 to 22,831 crore in FY25; value from Rs. 1,962 lakh crore to Rs. 3,509 lakh crore. Monthly volume grew from 1,739 crore (June 2024) to 2,099 crore (June 2025); value from Rs. 244 lakh crore to Rs. 264 lakh crore. UPI volume jumped from 92 crore (FY18) to 18,587 crore (FY25); value from Rs. 1.10 lakh crore to Rs. 261 lakh crore. In July 2025, UPI processed a record 1,946.79 crore transactions.
| Metric | FY 2017–18 | FY 2024–25 | June 2024 | June 2025 | July 2025 |
|---|---|---|---|---|---|
| Total digital payments — volume (crore) | 2,071 | 22,831 | 1,739 (monthly) | 2,099 (monthly) | — |
| Total digital payments — value (Rs. lakh crore) | 1,962 | 3,509 | 244 (monthly) | 264 (monthly) | — |
| UPI — volume (crore) | 92 | 18,587 | — | — | 1,946.79 (monthly record) |
| UPI — value (Rs. lakh crore) | 1.10 | 261 | — | — | — |
Looking ahead
Minister of State for Finance Pankaj Chaudhary said the focus on governance, technology and credit expansion is expected to enhance financial stability and promote inclusive growth.
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